- Walmart and Target have both been shifting their strategies to better compete with Amazon.
- Both Walmart and Target offer free two-day shipping on orders over $US35, grocery delivery, and in-store pickup options to meld their online and physical retail strategies.
- While both stores have vastly improved their e-commerce offerings, there is a striking difference between the physical presence of each store.
- On Wednesday, Target reported same-store sales were up 6.5% in the second quarter. On August 16, Walmart reported second-quarter same-store sales were up 4.5%.
Walmart and Target are both fighting to keep up with Amazon. One way that both big-box stores are doing this is by shifting their e-commerce strategies to make the transition between in-store and online shopping more seamless.
Walmart offers free two-day shipping on orders over $US35, grocery delivery, and free same-day store pickup on certain orders. Similarly, Target offers free two-day shipping on orders over $US35 and in-store pickup. Target announced earlier this year that it plans to offer same-day delivery of groceries from half of its 1,800 stores using Shipt, a delivery startup it acquired late in December. Both stores also offer free returns within 90 days of purchase and have store cards that reward frequent shoppers with discounts.
According to Cowen’s Consumer Tracker analysis and research from Frank N. Magid Associates, which was reported on by Retail Dive, Amazon has a large overlap of customers with both Walmart and Target, though Target’s is slightly larger. In the third quarter of 2017, 86.9% of Target shoppers also visited Amazon. At the same time, 82.9% of Walmart shoppers also visited Amazon.
But there’s one major advantage these two retailers have over the e-commerce giant: the stores themselves.
In Walmart’s earnings call on August 16, the retail giant reported second-quarter same-store sales were up 4.5%. It announced earlier this year that it would be remodeling 500 stores and building 20 new locations.
In an earnings call on Wednesday, Target reported same-store sales were up 6.5% in the second quarter. Target is working towards improving its physical outposts, and it plans on expanding its store fleet while many brick-and-mortar stores are closing. Target is opening more small-format stores – which can often be more profitable per square foot than its standard stores – in urban areas and near college campuses.
To see which store is best prepared to compete against Amazon, we visited a Walmart and Target in Westchester County, New York, and found that one offered a far superior shopping experience:
My first stop was Walmart. Even before I walked into the store, there were signs advertising its mobile and online pickup centres.
Just before the entrance, there was a kiosk for shoppers to search for their online orders that were ready to be picked up.
The women’s department was nearest to the entrance. I was unimpressed. Some of the styles were contemporary, but others completely missed the mark. The prices, however, were a steal, especially on basics like plain t-shirts.
The accessories were immediately next to the women’s clothing. The clearance display had jewellery and hair accessories all tangled up, and it looked like there were sets of jewellery where half of the items were missing. Some of the packaging was torn.
Empty shelves and abandoned shopping carts were common throughout the store.
In the middle of the clothing was a Jackson Hewitt Tax Service booth. The display was using shower curtains for privacy. There didn’t seem to be anyone working in this area.
My visit was just before Easter, and there were a few aisles filled with candy.
It was an absolute mess.
In fact, most of the store was.
There was obviously broken merchandise on display …
… and a lot of displays had empty shelves.
Groceries were on the lower level of the store. Everything had low prices, including produce. Walmart offers same-day grocery delivery, a feature that allows it to compete with Amazon’s Prime Now service.
Also downstairs was the home section of the store. Parts of it were well kept, but other parts looked like this.
The clearance section of the store was underwhelming.
Walmart did have a lot of toys and sporting equipment that were affordable and better organised than the rest of the store.
The electronics section also had a lot to offer, and prices were generally low. The back wall was lined with TVs. This section also carried video games, CDs, and phones.
Walmart had a large pharmacy in-store, offering consultations, immunizations, and a mobile pickup station using its app. The Walmart Mobile Pharmacy is an app, strictly for pharmacy use, that allows shoppers to save money and manage their prescriptions.
There was also a vision center by the registers. Near the registers was a self-checkout area. Though there were definitely perks to shopping at Walmart — including the store’s extremely low prices and huge variety of products — the store was messy and generally unpleasant to shop in.
After Walmart, I walked across the street to Target. The two stores are less than a minute’s walk away from one another. The first area in Target is called “Bullseye’s Playground,” which holds small, low-priced items like small toys or notebooks.
The women’s clothing section was the first department of the store I saw when walking in. The styles were definitely more contemporary than Walmart’s clothing, and everything was generally priced under $US30.
While it was more expensive than Walmart, many of the clothes were on sale. It was certainly cheaper than a typical department store would be, and the products were better organised and displayed than at Walmart.
The home section at Target was far better than at Walmart. It was more organised and had more in stock, plus the merchandise seemed to be in better condition at Target.
The toy department was about equal in size and selection to that of Walmart, though it was organised better. The same goes for books and video games.
There were as many TVs on display at Target as there were at Walmart, many of which were on sale. For the most part, the stores’ electronic sections seemed to offer the same products.
One striking difference between the two stores was how much more Target had in terms of selection, despite it being a smaller store. Prices on smaller items were certainly comparable to those on Walmart and Amazon …
… and there were fewer glaring messes, especially in the office and art supply aisles, where the Walmart I visited had struggled. Where prices did differ on smaller items, it was often by only a few cents.
The beauty and personal care departments of the two stores were identical, but Target seemed to have a bigger selection and more in stock.
Target’s clearance section was also significantly less depressing.
The grocery selection at Target was comparable to Walmart, and the prices were about the same. Essentials like pasta, bread, and produce cost nearly the same at each store. Target is also offering same-day grocery delivery from about half of its stores through Shipt.
Target does not have its own pharmacy, but there was a CVS pharmacy in the store. Unlike Walmart, it did not have its own vision center or an app for the pharmacy.
The registers were set up nearly identically to Walmart’s, including the self-checkout lane. Target also allows online orders to be picked up in-store, though this wasn’t as heavily advertised as it was at Walmart.
Overall, the shopping experience at Target was significantly better than at Walmart, and it still offered a lot of deals despite being slightly more expensive than Walmart. While both companies have shifted their online strategies to compete with Amazon, Target prevails when it comes to the in-store shopping experience.
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